Lending is the New Form of Giving 

May 2015's spotlight feature: Pakistan 

At the beginning of April, Ajaz and Nancy visited our partner in Pakistan to kick-off our first major impact assessment study. With the help of the University of Portsmouth, we have developed a questionnaire that will provide insight into the poverty levels of the entrepreneurs we support through Lendwithcare, enabling us to monitor and measure any changes. 

The first batch of interviews will be conducted with 500 first-time borrowers and we will be tracking the progress of these borrowers over the next 3-5 years. The pilot of this project has been launched in Pakistan but we hope to include at least one more Lendwithcare country before the end of the year. 

Lend with Care is an initiative (started in September 2010) from CARE International UK, part sponsored by The Co-operative Group, although the banking side of Lend with Care is done through Barclays. Microfinance is an ideal way to help people transform their own lives. 

The Lend with Care initiative enables poor communities, especially vulnerable, marginalised women, to find sustainable ways to earn a decent living. Working with global organisations, local microfinance institutions (MFIs) and with poor people direct, this initiative provides much-needed access to basic financial services and entrepreneurial training. With such help entrepreneurs start and develop their own businesses, which in turn helps them to build a better future for themselves and their families. Most of the real potential of microfinance is still to be realised. Many of the worlds poorest people still have no access to basic financial services, and so have little hope of lifting themselves out of poverty; that is why 'lendwithcare' was set up. 

How it Works 

1. The Entrepeneur has an idea.  As with most small businesses, it all starts with an idea. An entrepeneur in the developing world approaches a local microfinance institution (MFI) with a business plan. MFIs are effectively local banks; whilst they may vary in size, they all have a long-established working relationship with CARE International. An entrepreneur's business plan could be anything from dressmaking to expanding a small farm holding. 

2. The microfinance institution (MFI) gives a loan  Entrepeneurs are often living in desperate poverty, and business plans are dependent on time + other factors; for an agricultural project, for example, planting is limited to certain times of the year. An entrepeneur's success can be compromised (and their future jeopardised), if he/she has to wait for weeks to receive a loan; so the MFI needs to be able to act quickly. If the MFI is satisfied that the entepeneur's business plan is promising and sound, the proposal is approved and the initial loan provided. The MFI then helps the entrepeneur to construct a profile for lendwithcare.org. 

3. We meet the Entrepeneur on lendwithcare.org  The MFI uploads the entrepeneur's profile to lendwithcare.org. We (the lenders) can find profiles from all over the world in the 'Entrepeneurs' section, where we can choose which promising business we would like to support; the minimum loan per entrepreneur is 15. 

4. We lend our support  Having decided who we want to support, we provide a loan to get the entrepeneur's business plans off the ground. We can make a contribution towards the total needed, in increments of 15 or more; or we can invest the full amount needed for that business. 

5. We cover the loan  As soon as the entrepeneur's loan is fully funded, the money is transferred to the MFI, and used to replace the initial loan already paid out to the entrepeneur. We are now partly or fully funding his/her business; the MFI and CARE International continue to manage the progress of the loan to completion. Importantly, with the loan covered, the MFI can move onto funding another hopeful business plan. 

6. The Entrepeneur grows his/her business  The MFI and CARE International regularly update the entrepeneur's profile on the lendwithcare.org website, so it is easy for us to follow his/her amazing progress. We can see how their new source of income (from our loan) transforms every aspect of their lives, paying for food, medicine and school fees, to provide a better future for the whole family. 

7. The Entrepeneur repays our loan  The entrepeneur gradually pays back his/her loan. The MFI transfers these repayments to CARE International, which then credits the repayment to your lendwithcare.org Account. Usually we would expect to get our money back in full and on time, but sometimes things don't always go to plan, as with any business. If the entrepeneur is not able to keep up with the repayment schedule, we might have to wait longer to recover our investment. And there is the possibility that some/all of the original sum invested may not be get repaid. 

8. We decide what happens next  When the repaid loan is credited to your Account, you decide what happens next. The money can be withdrawn using the PayPal account; or it can be donated to CARE International to fund their life-changing work throughout the world; or you can do what most lenders do, and make another loan. 

9. Lendwithcare Angels  A monthly donation to lendwithcare.org will help extend this help to even more countries, and thus help more people pull themselves out of poverty. 

To have all of your questions answered, please visit http://www.lendwithcare.org/.  Click on this link to connect to the Rotary District 1100 Group (www.lendwithcare.org/groups/profile/rotaryd1100).

For more information contact: District International Chairman, Jill Johnston jill.johnston89@gmail.com